27/01/09 Agriculture joins Physical Gold and Oil as ETCs record their largest weekly inflow ever, up $581m

Physical gold ETCs accounted for 63% of these inflows with 20% from oil ETCs. …

Agriculture was a new source of ETC growth last week, accounting for 10% of total inflows.

ETFS Physical Gold (PHAU) and Gold Bullion Securities (GBS) saw the largest weekly inflow on record – 420,000 ounces worth of ETCs were issued, equivalent to the quarterly production of the world’s sixth largest gold company. Last week, the gold price rose from $835/oz to $899/oz, a weekly increase of 8% in USD terms and a weekly increase of 15% in GBP terms.

Agriculture ETCs saw their largest inflows since April 2008 last week. ETFS Agriculture (AIGA) and ETFS Wheat (WEAT) led gains with a total of $48m and $6m of inflows respectively. Other ETCs covering softs and grains also posted inflows last week. Agriculture is beginning to receive renewed interest from investors as it is widely perceived to be more independent of the current financial crisis. In addition, inventories of a number of agriculture commodities remain at or near historic lows, while there has been some reduced plantings in North America and poor weather in South America recently.

All agriculture ETCs are up by around 20% since early Decembe.

05 Dec 08     23 Jan 09     % change
ETFS Agriculture (AIGA)         4.95            6.07               22.6%
ETFS Softs (AIGS)                  3.97            4.72               18.8%
ETFS Grains (AIGG)               4.16            5.24                25.9%
ETFS Coffee (COFF)              2.24            2.60                15.8%
ETFS Corn (CORN)                1.29            1.62                 26.1%
ETFS Cotton (COTN)             1.20            1.46                 22.3%
ETFS Soybean Oil (SOYO)   5.56             6.45                16.1%
ETFS Soybeans (SOYB)     11.04           14.12                 27.9%
ETFS Sugar (SUGA)           10.79           12.94                 20.0%
ETFS Wheat (WEAT)            2.30              2.82                22.4%

Last week, a further $143m (£106m) of inflows were received into oil ETCs, led by an $46m increase in ETFS Crude (CRUD), $31m into ETFS Brent (OILB) and $24m into ETFS WTI (OILW). In total, there have been net inflows into oil ETCs of $629m since the start of December, resulting in asset growth of 450% to total $808m.

In total, weekly ETC trading volumes are up by 31% to $600m since January 2008 ($1.01 billion total volume last week!) – despite commodity prices having fallen over the past 12 months. According to a recently published London Stock Exchange newsletter, 3 of the top 4 ETFs/ETCs traded on the LSE are ETCs. Gold Bullion Securities (GBS), ETFS Physical Gold (PHAU) and ETFS Short Oil (SOIL) were the most traded ETCs in London for 2008. The increase in volumes is in direct contrast to Exchange volumes generally which have fallen over the past 12 months.

Source:ETFWorld.co.uk – ETFSecurities